Make sure your agreements are airtight.

Drafting contracts is an important part of everyday life as a business owner and entrepreneur. Regardless of the type of contract, it’s important you secure your business, avoiding potential disputes. Although contracts tend to look different depending on the purpose, there are some paragraphs that are always good to include. We list the 7 most important ones below.

1. Clearly identify the parties

The most important thing in any contract is to correctly identify the parties involved. So make sure you state all names, addresses, telephone numbers and other relevant contact details. It should be clear without risk of being misinterpreted in any way.

2. Describe the purpose of the contract

Clarify the purpose of the agreement in a way that is clear to all parties. List and accurately describe all the services and/or products you will deliver. Also, describe the expectations the parties have of each other and what the conditions are? Be overly clear rather than allowing for different interpretations of the deliveries. This makes the contract the same for everyone and makes the collaboration easier to implement.

3. Terms of payment

Here, it’s important to both state what things cost and what will happen if the payment isn’t fulfilled on time. Specify how much is to be paid, when the payment is to be made and in what way. Also, specify how the customer will be charged in the event of a delay in payment. State the payment charges for delay and what the interest rate is on late payments.

4. Time frames and deadlines

Having clear time frames and deadlines is essential to ensure that all parties are in agreement. This includes dates for both partial and final delivery. Here, you can also specify the timeframes for any feedback and corrections. And if the customer should have a chance have changes made before delivery, you hve to state how many revisions the customer gets within the terms of the contract. By limiting the time for revisions, you can ensure that the collaboration stays effective.

5. Responsibilities and authorities

It’s important to clarify what you need to be able to deliver according to the contract. In many cases, the customer needs to supply certain information in order for the work to be carried out. And in some cases you’ll need authorization from the customer to be able to deliver. By clarifying what the responsibilities and authorities are for each party, you ensure that you’re not held liable if you don’t get what you need to deliver successfully.

6. Confidentiality and intellectual property rights

If the collaboration and the contract mean that you’ll share confidential information, it’s important to include a confidentiality clause. And the contract should also state who owns the intellectual property rights if any. Usually, the customer owns the intellectual property rights for what is created. Sometimes however, the customer may need to purchase the rights meaning you need to state how this is done, what exactly the customer is buying and how much it costs.

7. You should never draft a contract without a force majeure clause

The force majeure clause usually appears in all contracts that are drawn up. It exempts you from liability if anything happens that is beyond your and the customer’s control. This applies, for example, to natural disasters, war and similar events that make it impossible to perform according to the contract.

Depending on the type of contract you’re writing, there may be other important paragraphs to include. So make sure to review the contract carefully so that you address and clarify all relevant issues before signing. It can be helpful to hire a lawyer to help you draft the contract. That ensures that you don’t end up in an unnecessary dispute that costs both money and a lot of time.

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Are you thinking about freelancing?

Starting to freelance is an exciting challenge, but there are a some legal aspects you need to be aware of before you get started. We have put together a checklist, perfect if you’re thinking of starting to work as a freelancer.

1. Decide on a business form before you start freelancing

Before you start freelancing, you need to decide on which business form you want for your business. You can of course use a third party company to invoice your clients, but in the long run you’ll benefit more from invoicing directly from your own company.

There are various company forms to choose from, such as sole proprietorships, trading partnerships and limited or incorporated companies. Which form suits you best depends entirely on the business you want to run. Make sure to take the time to research and choose the form best suited for your needs.

2. Register your company

Once you have chosen a suitable company form, you have to register your company. The registration process might vary depending on the form you choose. If you start a sole proprietorship or trading partnership, you’re required to register your company with the Swedish Tax Agency (Skatteverket). If you start a limited or incorporated company, you’ll also have to register your company with the Swedish Companies Registration Office(Bolagsverket).

3. Create invoice and payment templates

It is important that you have a clear plan of how to handle deposits and withdrawals, and also any late payments to your company. Start by creating a standard invoice that you can use to invoice your clients. Your invoice should include:

• the date you issue the invoice.
• due date.
• unique invoice numbers for each invoice you send.
• both your and your clients’s addresses.
• your organization number.
• what the late payment interest will be if you have to send your client a payment notice.
• a description of what you are invoicing for and how much it costs.
• VAT for each service or item you invoice for.
• total VAT amount.

4. Get the right insurances before you start freelancing

You also need to make sure you have the right insurances to protect yourself and your business. A common insurance policy for freelancers is liability insurance, which protects you if a client sues you for injury or loss caused by your work. You may also need other insurances depending on the type of work you do.

5. Manage your taxes and VAT

As a freelancer, you have to manage your own taxes and VAT. So it’s important you find out which taxes and fees apply to your business and that you make sure you’re registered for all necessary taxes. If your business requires that you pay or recieve VAT, you have to register your company for VAT according to Swedish law.

6. Manage your agreements and contracts

As a freelancer, it’s important that you have all your agreements and contracts in place to protect both yourself and your clients. Make sure to read and fully understand the contracts you sign with your clients. And make sure you have a standard agreement that you can use to formalize your services and terms. There are many templates for standard agreements that you can download for free, but to make sure that your agreements really do protect you and your company, reviewing your agreements with a lawyer is always a good thing.

7. Protect your intellectual property rights

As a freelancer, your work is your brand and your ideas are your assets. Because of that, make sure to protect your intellectual property rights by registering trademarks and patents where possible before you start to freelance. This can help you avoid someone else using your ideas without your permission and making sure you get paid for your work.

In conclusion, in a lot of ways being a freelancer will give you freedom. However, there are several legal aspects that are important to consider. By making sure you’re well prepared, you can protect yourself and your business while also focusing on developing your skills and expanding your business. And remember, there are great resources available to help you navigate the legal side of being a freelancer, so don’t attempt to solve any issues yourself if you don’t feel comfortable with it.

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